The Dow Jones Industrial Average (INDEXDJX:.DJI) is planted firmly in the red this morning following the third data release to signal a weakening labor market this week. Down 122 points as of 11 a.m. EDT, the index has a steep climb back to breakeven, with little help on the way from additional economic data releases.
And it was going so well…
Jobs data has been a big thorn in the market’s side all week. Following two other disappointing data points, this morning’s employment situation report was no different. Though analysts had expected an addition of 200,000 jobs in March, the month only delivered a paltry 88,000. And though the overall unemployment rate fell 10 basis points to 7.6%, it was mostly due to people dropping out of the labor market, according to the Labor Department — not a good sign.
The new trend of a weakening labor market may induce broader effects on the economy, as GDP may be revised to show lower consumer spending. It will also take its toll on the financial sector, which is following the Dow Jones Industrial Average (INDEXDJX:.DJI) south this morning.
Financials fall again
American Express Company (NYSE:AXP) is one of the Dow Jones Industrial Average (INDEXDJX:.DJI)‘s biggest losers this morning, down 2.65% so far in trading. The personal finance company was at a 52-week high just a little over a week ago following the news of FDIC insurance being added to its prepaid cards, as well as a 150-million-share buyback program. But continued concerns over the labor market may have hit the premium credit card company, which relies on consumer spending to generate revenues through interest. Another blow may have come in the form of a downgrade to “hold” by Jefferies Group analysts yesterday. Though other firms have reiterated buys and higher price targets, the company’s average rating remains a hold.
Bank of America Corp (NYSE:BAC) is always under the watchful eye of investors, which can sometimes lead to high volatility without much reason. But this week’s labor market disappointments have only stifled the bank a bit. Down only 0.17% as of this writing, Bank of America Corp (NYSE:BAC) is the winner of the financial losers. This week produced mixed news for the bank, with a tally in its win column for the rise in global investment banking fees, a settlement with the National Credit Union Administration over the sale of bad mortgages, and a court ruling against the bank in favor of insurer MBIA Inc. (NYSE:MBI). So far it seems that the good news is outweighing the bad, but Bank of America Corp (NYSE:BAC) investors should keep an eye out for the consumer credit report later this afternoon — it could hit the financials hard if the disappointing news trend continues.
The article Dow Plummets on More Weak Labor Market News originally appeared on Fool.com is written by Jessica Alling.
Fool contributor Jessica Alling has no position in any stocks mentioned, but you can contact her here. The Motley Fool recommends American Express. The Motley Fool owns shares of Bank of America and JPMorgan Chase & Co (NYSE:JPM).
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